Chesapeake Potomac Telephone Company v. Forrest Manning

• Decision Date: 02 June 1902
• Docket Number: No. 363,363
• Parties: CHESAPEAKE & POTOMAC TELEPHONE COMPANY, Appt. , v. J. FORREST MANNING and Harry E. Rupprecht, Trading as J. Forrest Manning & Company
• Court: U.S. Supreme Court

186 U.S. 238

22 S.Ct. 881

46 L.Ed. 1144

CHESAPEAKE & POTOMAC TELEPHONE COMPANY, Appt.,

v J. FORREST MANNING and Harry E. Rupprecht, Trading as J. Forrest Manning & Company.

No. 363.

Argued March 10, 11, 12, 1902.

Decided June 2, 1902.

On July 14, 1898, the appellees commenced this suit in the supreme court of the District of Columbia, to restrain the defendant from discontinuing its telephone service to them.

Their bill alleged that the defendant was a corporation organized under the laws of the state of New York, and for a long time past engaged in the business of furnishing telephone exchange service in the District of Columbia; that with the assent and under the direction of the Congress of the United States and the commissioners of the District of Columbia it was occupying the streets, avenues, and alleys of the city of Washington with its conduits and electric wires; that the plaintiffs had a contract with the defendant for such service, terminable by either party upon ten days' notice in writing; that on July 2 they gave notice of their intention to terminate such contract. The bill further alleged the passage by Congress on June 30, 1898, of an act limiting the charges for telephone service; that they desired to continue the use of the telephone service furnished by defendant, and had tendered the amount required to be paid under the act of Congress, but that nevertheless the defendant threatened to remove the telephone and its appliances now in the premises of plaintiffs and to discontinue its telephone service to them.

The defendant answered admitting its incorporation, its business of furnishing telephone service, the passage of the act of Congress, set forth its contract with the complainants and the correspondence in reference to the termination of the contract, and alleged that the act of Congress had no application to any individual desiring telephone service, but only to such service as might be rendered for the public to the District of Columbia; that if it did apply to individuals desiring telephone service the act was beyond the power of Congress, inasmuch as the rates prescribed in it were arbitrary, unjust, unreasonable, and unconscionable, because the service could not be furnished at the rates named therein without an actual loss to the defendant, thus practically working a deprivation of its property and property rights without just compensation or due process of law.

A preliminary injunction was granted restraining the defendant from removing the telephone and its appliances from the premises of plaintiffs or discontinuing its telephone service. Other suits of a similar nature were commenced in the same court by different parties against the telephone company. An order of consolidation of all these suits was entered, but the subsequent proceedings were carried on in this suit, the testi- mony introduced being also used in the others, and their disposition the same as that made of this. A large volume of testimony was taken, and the case was submitted on pleadings and proofs. On February 28, 1900, a decree was entered dissolving the preliminary injunction and dismissing the bill of complaint, with costs. Mr. Justice Barnard, before whom the case was heard, was of the opinion that the rates fixed by the act were unreasonably low for the service and supplies to which they refer, and that, therefore, the act could not be sustained. An appeal was taken to the court of appeals of the District, which on May 21, 1901, reversed the decree of the supreme court and remanded the case with instructions to enter a decree granting the permanent injunction, as prayed for, but with a single modification. From such decree the case was brought to this court on appeal.

Messrs. John W. Griggs and A. S. Worthington for appellant.

Messrs. Arthur A. Birney, John J. Hemphil, Henry F. Woodward, and Arthur Peter for appellees.

Mr. Justice Brewer delivered the opinion of the court:

A preliminary question is whether the decision of the court of appeals is a final decree. We are of opinion that it is. After ordering a reversal of the decree of the supreme court, it adds: 'And that this cause be, and the same is hereby, remanded to the said supreme court, for the entry of a decree granting the injunction in conformity with the opinion of this court.' The closing sentence of the opinion is as follows: 'For the reasons given the decree will be reversed, with costs, and the cause remanded for the entry of a decree granting the injunction in conformity with this opinion.' Prior thereto it is stated:

'Congress could not, and did not, undertake to compel the defendant to remain in occupation of the field of operations and carry on business at the imposed rate against its will.

'If the defendant, convinced that the rate fixed by law is ruinously low, had suspended its business and abandoned all operations within the District, Congress would have no power over it other than to compel it to remove its obstructions from the streets and other public places. Nor would the courts, in such event, have any power to compel the defendant to give its services to any person. But the defendant cannot remain and carry on its former business in defiance of the law. Persisting in its business, it must be regarded by the courts as accepting the condition and coming under obligation to perform its services at the statutory rate. So persisting and at the same time refusing obedience, it is within the judicial power to compel defendant to observe the rate fixed by Congress until such time in the future as it may voluntarily withdraw from business or Congress may relieve.

'According to this view of the defendant's rights and obligations, the preliminary injunction was properly granted, and should have been perpetuated upon final hearing, with the limitation before suggested.'

The preliminary injunction, thus referred to by the court of appeals, 'ordered, that upon payment by the complainants to the defendant of the sum of $12.50 as one quarter's rent for the use of the telephone described in their bill, the defendant, its officers, agents, and employees, be, and they are hereby, during the pendency of this suit restrained and enjoined from removing or attempting to remove from the premises of the complainants described in the bill of complaint the telephone and its appliances by said defendant heretofore placed therein, and from refusing or neglecting to connect the same with other telephones upon being requested so to do, and from neglecting or refusing to furnish telephone-exchange service to the complainants for the said telephone in the same manner as it has heretofore furnished such service.'

It thus appears that the court of appeals made a complete disposition of the controversy; that all that was left for the supreme court was the ministerial duty of entering a final injunction in the language of the preliminary order, with the proviso that it should operate until such time in the future as the de- fendant should voluntarily withdraw from business in the District. Clearly this was a final decree. Tippecanoe County v. Lucas, 93 U. S. 108, 23 L. ed. 822; Bostwick v. Brinkerhoff, 106 U. S. 3, 27 L. ed. 73, 1 Sup. Ct. Rep. 15, and cases cited in the opinion; Mower v. Fletcher, 114 U. S. 127, 29 L. ed. 117, 5 Sup. Ct. Rep. 799.

We pass, therefore, to a consideration of the merits. The legislation of Congress appears as a proviso in the District appropriation act, and is in the following words:

'Provided, That from and after the passage of this act it shall be unlawful for any person or any telephone company doing business in the District of Columbia to charge or receive more than fifty dollars per annum for the use of a telephone on a separate wire; forty dollars for each telephone, there being not more than two on a wire; thirty dollars for each telephone, there being not more than three on a wire, and twenty-five dollars for each telephone, there being four or more on the same wire.' 30 Stat. at L. 525, 538, chap. 540.

In its answer defendant pleaded that this legislation 'has no application to any individual desiring telephone service, but applies only to such service as may be rendered for the public to the District of Columbia, for the service rendered to said District for fire alarm, police, and other public purposes.' This defense is undoubtedly based on the fact that the paragraph in which this proviso is found, entitled 'telegraph and telephone service,' consists solely of appropriations for salaries and supplies in connection with telegraph and telephone service. As the paragraph, therefore, deals solely with public expenditures, the contention is that the proviso is a qualification of such public expenditures. As said by Mr. Justice Story, in Minis v. United States, 15 Pet. 423, 445, 10 L. ed. 791, 799:

'The office of a proviso, generally, is either to accept something from the enacting clause, or to qualify or restrain its generality, or to exclude some possible ground of misinterpretation of it, as extending to cases not intended by the legislature to be brought within its purview.'

See also Austin v. United States, 155 U. S. 417, 431, 39 L. ed. 206, 211, 15 Sup. Ct. Rep. 167.

While this is the general effect of a proviso, yet in practice it is not always so limited. As said in Georgia R. & Bkg. Co. v. Smith, 128 U. S. 174, 181, 32 L. ed. 377, 380, 9 Sup. Ct. Rep. 47, 49:

'The general purpose of a proviso, as is well known, is to except the clause covered by it from the general provisions of a statute, or from some provisions of it, or to qualify the operation of the statute in some particular. But it is often used in other senses. It is a common practice in legislative proceedings, on the consideration of bills, for parties desirous of securing amendments to them to precede their proposed amendments with the term 'provided,' so as to declare that, notwithstanding existing provisions, the one thus...